 "Brand Sony will continue to focus on premium end: Kenichiro Hibi")
With Sony deciding to sell off the Vaio range of laptops and hiving off its television business into a separate entity, there have been questions about the impact on India. Sony India Managing Director Kenichiro Hibi, in his first interview after the global announcement, tells Surajeet Das Gupta and Sounak Mitra smartphones and TVs are important for the business which the fourth-largest for Sony globally. Edited excerpts:
With the decision to focus only on high-end TVs, what is Sony's way forward in India?
Market demand in India is different. In Japan, the 4K (high end technology) television is the biggest segment, thus, it is the focus there. When we look at India, the 4K category is a growing category. But, we cannot do business by selling just 4K TVs, or high-end products.
Vaio contributes about 15 per cent to Sony India's revenues. What impact would it have now that you are selling it off?
That was a global decision, and not only for India. It was a strategic decision for the future. The market, worldwide, is moving towards mobile devices - smartphones and tablets. The PC market is seeing negative growth globally. Of course, Viao sales will not be there. So, there will be impact. But, thanks to our growing business segments like TV and smartphones, along with other categories like audio and camera, we are expecting big growth compared to the previous year. Viao sales will stop in India by July-August, but we will continue to offer service support .
For this year , we are targeting about 20 per cent increase in turnover as compared with Rs 10,000 crore in FY-2014. That is effectively a 35-per-cent growth in 2014, as Vaio's contribution would not be there. This is definitely one of the biggest growth years for Sony in India.
Is mobile phones your next big focus area in India? Your share is still very small.
We started selling handsets exclusively from Sony about a year back. Within one year, we have captured about 10 per cent of the smartphone segment in India, from just about 2-3 per cent. We will concentrate on smartphones only globally, and in India this year, we are looking at launching over 30 models. We have products starting from Rs 9,000, but we'll not get into a price war. We are not the cheapest brand, and we'll always have a price gap. Today 35 per cent of our revenues come from mobile phones and 35 per cent from TV. We expect mobile phones will be the biggest contributor to revenues for Sony India very soon.
Will you be looking at setting up production in India or continue to import?
We have always been exploring possibilities of manufacturing in India. But, there is no decision till date. We have a software and research centre in Bangalore where we have about 1,500 people. Input from here is important in our global development. It is an important centre for Sony globally. India is currently the fourth largest market, based on country sales for Sony globally, behind US, Japan and China. So, our voice is always heard in the headquarters.
With the decision to focus only on high-end TVs, what is Sony's way forward in India?
Market demand in India is different. In Japan, the 4K (high end technology) television is the biggest segment, thus, it is the focus there. When we look at India, the 4K category is a growing category. But, we cannot do business by selling just 4K TVs, or high-end products.
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However, Sony, as a brand, has always focused on the premium end of the market. Even in India, our primary focus are big-screen and high-end TVs. Data shows, we are dominant in the high end. But, we also have to have affordable products for the mass market. We have 32-inch (screen) TVs and now, have launched 22-inch (for around Rs 15,000). But, even those would have premium positioning. In 2014, we want to penetrate smaller markets deeper with LCD and LED TVs. We are also increasing our distribution network and have about 10,000 retail outlets across the country.
Vaio contributes about 15 per cent to Sony India's revenues. What impact would it have now that you are selling it off?
That was a global decision, and not only for India. It was a strategic decision for the future. The market, worldwide, is moving towards mobile devices - smartphones and tablets. The PC market is seeing negative growth globally. Of course, Viao sales will not be there. So, there will be impact. But, thanks to our growing business segments like TV and smartphones, along with other categories like audio and camera, we are expecting big growth compared to the previous year. Viao sales will stop in India by July-August, but we will continue to offer service support .
For this year , we are targeting about 20 per cent increase in turnover as compared with Rs 10,000 crore in FY-2014. That is effectively a 35-per-cent growth in 2014, as Vaio's contribution would not be there. This is definitely one of the biggest growth years for Sony in India.
Is mobile phones your next big focus area in India? Your share is still very small.
We started selling handsets exclusively from Sony about a year back. Within one year, we have captured about 10 per cent of the smartphone segment in India, from just about 2-3 per cent. We will concentrate on smartphones only globally, and in India this year, we are looking at launching over 30 models. We have products starting from Rs 9,000, but we'll not get into a price war. We are not the cheapest brand, and we'll always have a price gap. Today 35 per cent of our revenues come from mobile phones and 35 per cent from TV. We expect mobile phones will be the biggest contributor to revenues for Sony India very soon.
Will you be looking at setting up production in India or continue to import?
We have always been exploring possibilities of manufacturing in India. But, there is no decision till date. We have a software and research centre in Bangalore where we have about 1,500 people. Input from here is important in our global development. It is an important centre for Sony globally. India is currently the fourth largest market, based on country sales for Sony globally, behind US, Japan and China. So, our voice is always heard in the headquarters.